EVENTS AFTER REPORTING PERIOD

Noelle Company reported that the year-end is December 31, 2018 and the financial statements are

authorized for issue on March 15, 2019.

1. On December 31, 2018. Noelle Company had a receivable of P400,000 from a customer that is due 60

days after the end of reporting period. On January 15, 2019, a receiver was appointed for the said

customer. The receiver informed Noelle that the P400,000 would be paid in full by June 30, 2019,

2. Noelle Company measures investments in listed shares held for trading at fair value through profit or

loss. On December 31, 2018, these investments were recorded at the market value of P5,000,000.

During the period up to February 15, 2019, there was a steady decline in the market value of all the

shares in the portfolio, and on February 15, 2019, the market value had fallen to P2,000,000.

3. Noelle Company had reported a contingent liability on December 31, 2018 related to a court case in

which Noelle Company was the defendant. The case was not heard until the first week of February 2019.

On February 11, 2019, the judge handed down a decision against Noelle Company. The judge

determined that Noelle Company was liable to pay damages and costs totaling P3,000,000.

4. On December 31, 2018, Noelle Company had a receivable from a large customer in the amount of

P3,500,000. On January 31, 2019, Noelle Company was advised by the liquidator of the said customer

that the customer was insolvent and would be unable to repay the full amount owed to Noelle

Company. The liquidator advised Noelle Company in writing that only 10% of the receivable will be paid

on April 30, 2019.

Prepare adjusting entries on December 31, 2018 to reflect the events after reporting period.

1.

2.

3.

4.

1.Distinguish financial capital and physical capital.

2.Distinguish income and revenue.

2.Define expenses and enumerate the classification of expenses.

3.Explain the two forms of income statement.

4.Which form of income statement is required?